Tags: Shiller | Tech | Bubble

Yale’s Shiller: We May Be Heading Into Another Tech Bubble

Tuesday, 03 April 2012 08:27 AM

Yale economist Robert Shiller says we may well be heading into another tech bubble.

"I think technology has a fascination," Shiller told Yahoo's Daily Ticker.

"It's too much a part of our sense of the future."

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"We've got an exciting thing going. All of the new gadgets are just so breathtaking.”

There's always a chance of another bubble, says Shiller, but predicting one is “like predicting an epidemic.” Whether or not there's a bubble depends on "the contagion and promotion of ideas."

A slow economic recovery and the prospects for high long-term unemployment are acting as a brake for investors, thus slowing down tech investing as well, Shiller observes. “We do still have a very high level of long-term unemployment, and that is a drag on the overall economy,” he says.

However, reservations notwithstanding, Shiller says there are huge fortunes to be made in technology. “That kind of excitement I do feel in the air," he says.

Shiller compares the current market rally with the rally between 1932-1937, and cautions that there could still be another setback. “The evidence shows that financial crises of this magnitude have been slow to repair,” he says. “I don’t see that we’re out of the woods.”

"I would still put money in the stock market right now,” Shiller says. “But not overwhelmingly.”

“This is the time to be reasonably diversified."

Wall Street Beat reports that technology stocks ended their best quarter on the markets since the end of 2000, when the dot-com bubble burst and shares plunged.

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